Thrifty Banker
  • Politics
  • Business
  • World
  • Investing
  • Politics
  • Business
  • World
  • Investing

Thrifty Banker

Business

Prices finally fell last month after 3.5 years of increases

by December 27, 2023
December 27, 2023
Prices finally fell last month after 3.5 years of increases

New government data showed prices notching a monthly decline for the first time since April 2020, adding to an improving picture on inflation as the new year looms.

The Personal Consumption Expenditures Price Index (PCE), one of two major readings on inflation, fell by 0.1% between October and November, the Bureau of Economic Analysis said Friday — the first monthly decline in more than 3 1/2 years.

Combined with other recent data showing disposable personal income and consumer sentiment rising, the United States’ economy appears to be heading into 2024 on strong footing even as it cools down. That has boosted expectations for a potential “soft landing” that reins in inflation without triggering mass layoffs or a recession.

Lower gas prices and cheaper goods contributed to the modest decline in Friday’s PCE numbers. Because prices have largely continued to rise this year, they still clocked in 2.6% higher than in November 2022. But that’s an improvement from the PCE’s 5.5% yearly inflation rate back in January and 7.1% rate in June 2022.

Earlier this month, the Consumer Price Index, the other major inflation measure alongside the PCE index, showed annual inflation slowing to 3.1% in November, easing a bit from a 3.2% rate the month before.

“[T]he latest data confirm that the disinflation momentum is gathering pace,” EY senior economist Lydia Boussour said in a note, using the term for when price increases slow down — which is different from “deflation,” when prices outright drop.

As prices fell in November, American households’ capacity to spend increased, the BEA’s Friday report showed. Real disposable income, which adjusts for inflation, grew by 0.4% between October and November, after a summer of nearly no growth. 

A separate report that the University of Michigan released Friday showed consumer sentiment soaring 14% in December. The jump reversed four months of declines and reflects growing optimism among U.S. spenders, whose outlays account for about two-thirds of the economy.

“All age, income, education, geographic, and political identification groups saw gains in sentiment this month,” the University of Michigan survey’s director, Joanne Hsu, wrote in the report. “The index is now just shy of the midpoint between the pre-pandemic reading and the historic low reached in June 2022.”

That report came days after a different measure, the Conference Board’s consumer confidence survey, also showed Americans’ economic optimism surging this month.

“These trends are rooted in substantial improvements in how consumers view the trajectory of inflation,” Hsu said.

The battle isn’t over yet, though.

The Federal Reserve, which has raised interest rates to 22-year highs to slow the pace of price increases, has been encouraged by the progress but acknowledges there’s still work to do to get inflation down to its target of 2% on “core” PCE. That narrower measure excludes categories with more volatile prices, like energy and food — which can reflect swings due to geopolitical events and weather-related factors, respectively.

Core PCE clocked in at 3.2% in November, Friday’s BEA figures showed. Omair Sharif, the founder of Inflation Insights, cautioned that additional months of encouraging data would be needed to confirm that the Fed is on a clear path to its 2% goal.

“The more benign inflation data is certainly something to celebrate, but there is some turbulence ahead” in the first quarter of next year, he said in a note, that Fed officials will need to navigate before cutting rates.

This post appeared first on NBC NEWS
0
FacebookTwitterGoogle +Pinterest
previous post
Americans ramped up spending during the holidays despite some financial anxiety and higher costs
next post
Dems, GOP both won big victories and suffered defeats in 2023. Here are the year’s top election takeaways

Related Posts

A year after Silicon Valley Bank failed, another...

March 2, 2024

Cruise CEO Kyle Vogt resigns from GM-owned robotaxi...

November 22, 2023

UAW’s Tennessee win fuels backers’ hopes in the...

April 26, 2024

FTX exec who turned on Sam Bankman-Fried sentenced...

May 30, 2024

Family Dollar to close almost 1,000 stores

March 14, 2024

Stellantis could close 18 facilities under UAW deal...

September 19, 2023

Chick-fil-A asks customers to throw out Polynesian sauce...

March 7, 2024

Tesla asks shareholders to vote again on Musk’s...

April 18, 2024

Alaska Airlines to buy Hawaiian Airlines in $1.9...

December 4, 2023

A short government shutdown wouldn’t crash the economy,...

October 3, 2023

    Sign up for our newsletter to receive the latest insights, updates, and exclusive content straight to your inbox! Whether it's industry news, expert advice, or inspiring stories, we bring you valuable information that you won't find anywhere else. Stay connected with us!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Popular

    • 1

      Top 10 Countries for Natural Gas Production (Updated 2024)

      April 6, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Top 10 Uranium-producing Countries (Updated 2024)

      April 18, 2024
    • 4

      A GOP operative accused a monastery of voter fraud. Nuns fought back.

      January 3, 2025
    • 5

      Top 9 Nickel-producing Countries (Updated 2024)

      April 23, 2024
    • 6

      Australian abolitionist, Grace Forrest, receives coveted ‘Freedom from Fear’ award

      April 13, 2024
    • 7

      LME Sanctions on Russian Metal Push Copper, Nickel and Aluminum Prices Higher

      April 17, 2024

    Categories

    • Business (1,028)
    • Investing (2,046)
    • Politics (2,977)
    • Uncategorized (20)
    • World (3,347)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: thriftybanker.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thriftybanker.com | All Rights Reserved